Roberts Insurance Group Blog
By now, you're probably aware that there has been a major increase in the cost of new construction homes across the country. The prices of lumber and other common construction materials have been sky rocketting over the last several months due to a decrease in supply and an increase in demand. In addition, labor shortages have drastically increased the cost of labor.
The recent increases in construction costs have many Georgia homeowners wondering, what does this mean for my home insurance? Is my home adequately covered? Will my rates go up? We're going to answer that for you:
What Does This Mean For Your Georgia Home Insurance?
An increase in the cost of construction DOES impact your home insurance in Georgia. The home that cost $400,000 to build or rebuild a year or 2 ago can now cost upward of $500,000. This means that insurance companies everywhere are having to make adjustments to their replacement cost estimating software to account for the changes in construction costs. Whether you're getting a new home insurance policy or your renewing your existing one, you should expect an increase in the dwelling coverage or replacement cost estimate.
Is Your Home Adequately Covered?
It is hard to say without reviewing your policy but, in general, your home insurance should still have adequate coverage to rebuild your home in the event of a total loss even if you haven't purchased a new policy recently or renewed your existing one recently. This is because almost all home insurance policies in Georgia come with additional replacement cost/extended replacement cost coverage that adds an additional 25 to 100% of dwelling coverage on top of the underlying replacement cost estimate. All of the homes we insure come with this coverage but I can not speak on behalf of all agents or carriers. I would recommend reviewing the replacement cost estimate and the policy coverage with your agent as soon as possible, just to be safe.
Will Your Rates Go Up?
Yes and no. Any time there's an increase in coverage, there's potential for an increase in the premium you pay. In general, insurance companies have to charge more for $500,000 of coverage versus $400,000. However, there is not necessarily an increase in the potential or likelihood of a claim. If you do get a significant rate increase, it would be wise to have your agent or broker try to re-market your policy to see if there is something more affordable.
The Roberts Insurance Group is a Georgia Insurance Broker specializing in commercial and personal insurance for our clients throughout the state of Georgia. We help our clients lower their cost of insurance with our superior claim and risk management expertise and our extensive carrier access. We are in the business of building relationships with our clients to help them grow and succeed. Contact us today to see what we can do for your family or business.